Weak economic data, stronger dollar weigh on stocks; Dow gives up 130 points

Weak economic data, rising dollar hurt stocks

NEW YORK — A stronger dollar and more discouraging signs of a subdued economic recovery triggered a broad sell-off in stocks.

Major indexes tumbled more than 1 percent in early trading, including the Dow Jones industrials, which fell about 130 points. Energy and material stocks showed the biggest losses as a jump in the dollar sent commodity prices tumbling.

The latest data on the economy gave investors little incentive to hold on to stocks. A private forecast of economic activity rose less than expected in October, signaling slow growth next year.

The Conference Board said its index of leading economic indicators rose 0.3 percent last month, less than the 0.5 percent gain economists anticipated. The index climbed 1 percent in September.

The index forecasts economic activity over the next six months by measuring current jobless aid claims, stock prices, consumer expectations, building permits for private homes, the money supply and other data.

There was also disappointing news on housing. The Mortgage Bankers Association said more than 14 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of September. The industry group’s quarterly report fed fears that the housing market’s recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising.

Earlier Thursday, a report from the Labor Department said the number of newly laid-off workers seeking unemployment insurance was unchanged last week at 505,000, in line with expectations. But the figure remains above the level that would indicate the economy is adding jobs.

After stocks breached new 13-month highs earlier this week, investors want to see more concrete evidence that the economic recovery is firmly on track. High unemployment still has investors worried that the massive gains in stocks since early March are overdone.

The Dow fell 129.23, or 1.2 percent, to 10,297.08. The Standard & Poor’s 500 index fell 16.46, or 1.5 percent, to 1,093.34, while the Nasdaq composite index fell 39.95, or 1.8 percent, to 2,153.19.

More than five stocks fell for every one that rose on the New York Stock Exchange, where volume came to 226.6 million shares, compared with 245.3 million at the same time on Wednesday.

Bonds rose as stocks fell. The yield on the benchmark 10-year Treasury note fell to 3.35 percent from 3.37 percent late Wednesday.

The ICE Futures US dollar index, which measures the dollar against other major currencies, gained 0.6 percent, weighing on commodities prices. Gold gave up $3 to $1,137, while oil prices dropped $1.41 to $78.17 a barrel on the New York Mercantile Exchange.

Overseas, Japan’s Nikkei stock average fell 1.3 percent. In afternoon trading, Britain’s FTSE 100 was declined 0.7 percent, Germany’s DAX index fell 0.9 percent, and France’s CAC-40 declined 0.9 percent.

In other trading Thursday, the Russell 2000 index of smaller companies fell 14.52, or 2.4 percent, to 585.63.